FCC's Incentive Auction - Freeing Up Spectrum

On the 28th September 2012, the USA’s FCC announced it would be conducting a rather unique auction in 2014 to help alleviate an impeding spectrum crunch that is looming from the burgeoning adoption of 3G- and 4G-enabled smartphones, tablets, automotive vehicles, machine-to-machine modules, and other enterprise and consumer electronics.

The USA has been on the forefront of innovative regulatory policy. In the 1990s, the FCC applied Game Theory to ensure optimal price setting for PCS and AWS spectrum licenses. Now the FCC intends to set up an Incentive Auction that allows broadcast television spectrum to be repurposed for mobile broadband by offering the broadcasters financial incentives to relinquish some, or all, of their spectrum assets.

While the date for the FCC’s Incentive Auction is set for 2014, the FCC is still in the process of soliciting consultations from interested parties. It is certainly an innovative procedure and one that may well be emulated by a number of state spectrum regulators as a mechanism to arbitrate between incumbent and prospective spectrum stake-holders – not just in the mobile cellular industry but also potentially other industries that occupy wireless spectrum.